The Securities and Exchange Commission sued insurance magnate Greg Lindberg, alleging that he and a lieutenant defrauded insurers out of more than $75 million through a series of undisclosed related-party transactions and advisory fees paid to a Malta entity, WSJ Pro Bankruptcy reported. “We allege a massive fraudulent scheme, involving unique financial structures and various complex investments,” said Osman Nawaz, chief of the SEC Division of Enforcement’s Complex Financial Instruments Unit, in a news release on Tuesday accompanying the complaint. The SEC’s civil action is the first government allegation of fraud against Mr. Lindberg, a North Carolina entrepreneur who bought several insurers and proceeded to loan at least $2 billion of their assets to entities he controlled. Four North Carolina insurers have since been placed into rehabilitation, a type of receivership akin to reorganization under federal bankruptcy law, by that state’s regulators while another in Bermuda is in liquidation. Mr. Lindberg in July was released from federal prison after an appeals court overturned his 2020 conviction on a separate, criminal matter, ruling that the district court judge erred in his jury instructions. That case, in which Mr. Lindberg was accused of attempting to bribe North Carolina’s insurance commissioner to obtain more favorable regulatory treatment, is tentatively scheduled for retrial in March 2023. Mr. Lindberg has denied wrongdoing in the criminal case. Referring to the SEC civil action, Susan Estrich, a spokeswoman for Mr. Lindberg, called it “piling on,” saying it was evidence of a “weak case,” in a statement Tuesday.
